Why is Sarawak sago flour sold at such a low price ?

The Borneo Post of Aug 6 2010 reported this “ Unimas vice chancellor Prof Dr Khairuddin Abd Hamid said the state exported around 60,000 to 70,000 tonnes of sago annually with income of US$10 million.”

This means that a ton of sago starch is sold for an average price of about RM $ 150-160? Is this correct?

I was told that our Sago starch is sold mainly to Ajinomoto in West Malaysia for the making of food seasoning (MSG) and sago flour used as a replacement for Tapioca flour. A check on the price of Tapioca flour FOB Bangkok revealed that its FOB price is US $ 620 per mt or roughly RM $ 2000 per mt . So why is Sarawak selling its Sago starch 12 times cheaper than the Thai Tapioca flour ? .

I am not sure if Borneo Post has quoted the good Professor and has added another zero to our export. I am incline to believe that the export quantity could be 5000-6000 mt and this means we are selling the sago flour for RM $ 1500-1600 per mt which is still cheaper than Tapoica but it is closer to the gap .

On the other hand , Borneo Post could have correctly quoted UNIMAS and it could be true that Sarawak’s sago flour is being exported at RM $150-160 per mt. If this is the price, the first action that the Sarawak Government should take is to take a good look at the market and ask itself why we are selling our sago flour at such a low price.

Borneo Post continues ” According to CoESAR director, Prof Dr Kopli Bujang, sago palm is one of the major contributors to the state’s economy.” Is it ? Not when it is only worth US$ 10 million . It is not even a healthy industry at all .

The Borneo Post dated Aug 6 continues as follows :

August 6, 2010, Friday

KOTA SAMARAHAN: Housing and Urban Development Minister Datuk Amar Abang Johari Tun Openg is optimistic that sago can be a significant export commodity for the state.

“I believe that the income from export of sago can be increased through value added products, and in view of this the government welcomes inputs to assist in research and development (R&D) of the commodity,” he said yesterday.

Speaking when launching Centre of Excellence for Research in Sago Palm (CoESAR) at Universiti Malaysia Sarawak (Unimas) campus, here, Abang Johari noted that Sago had long been an important commodity to the state.

He stressed that sago industry can be developed to the level of oil palm, through concerted efforts by the government, intellec-tuals and researchers.

The minister was glad to note the commitment of Unimas, which had undertaken R&D on sago since 1993, adding that such effort by the university would complement the development of Sarawak Corridor of Renewable Energy (SCORE).

According to him, the state was committed in developing a sustainable sago industry as can be seen with the large scale planting of the commodity in Mukah since ten years ago.

He congratulated Unimas which had won accolades both at national and international levels.

Meanwhile, Unimas vice chancellor Prof Dr Khairuddin Abd Hamid said the state exported around 60,000 to 70,000 tonnes of sago annually with income of US$10 million.